The September jobs report was late. The shutdown of the U.S. federal government put the release back by several weeks. Then, when the data finally showed up, it was uninspiring…at best. Some might say, “meh.” (For the uninitiated, “meh” is an exclamation used to express a lack of enthusiasm). At only 148,000, the headline payroll-growth number disappointed. The pace of U.S. payroll growth has definitively slowed in the last six months, which strengthens the argument for the Fed to postpone tapering their QE program into 2014.
The mediocre details of September’s late report broke down like this. Private sector payrolls increased by only 126,000. Definitely “meh.” Read more
Growth is good. So, even at a revised 0.1%, German GDP growth could still be considered good. Sure, it wasn’t as much as economists had forecasted, but growth still beats recession – especially, after several months where the economic malaise in the Eurozone threatened to turn into a Teutonic Plague as well. The actual German output data has been much better than the dreary business surveys. Manufacturing orders (up more than twice what was forecast), industrial production (up 1.2% versus expectations of -0.1%), trade (surplus of€18.8 billion), and consumption all looked strong as the first quarter ended. Read more
Last week, the economics blogosphere was ablaze with commentary on an economics paper from 2010 called “Growth in the Time Debt.” The paper was by Carmen Reinhart and Kenneth Rogoff, both of Harvard, and has come to be known as just “Reinhart-Rogoff.” What’s so big about a three-year-old economics paper? Well, most of the current calls for austerity in the U.S. and around the world cite this paper as the major influence in cutting government spending…oh, and the conclusions of the paper turn out to be wrong. Read more
With the United States stumbling a bit in this week’s announcement of fourth-quarter GDP, it might be an appropriate time to ask the question, is it Asia that’s leading this global recovery? Generally, I’d agree with an assertion that Asia, particularly China, is somewhat driving the global economic recovery. While U.S. GDP was set back by some one-off issues with defense spending, China saw quarter-on-quarter growth of around 2%, driven by up-ticks in industrial output and a boost in exports late in the year. The smaller Asian economies are also doing very well, but none swings the lead that China does.
When contemplating Asia, it’s important to remember that the economic story in Asia, and above all in China, was one of a real estate and infrastructure boom; that is, until two or three years ago. Read more
Usually when GDP growth unexpectedly drops below zero, economists and markets start screaming “recession!!” With today’s print of GDP (gross domestic product) showing a headline 0.1% contraction, I’d encourage you not to worry too much and think instead about shifting those letters to DGP and remember “Don’t Gotta Panic.”
Today’s initial estimate for fourth-quarter 2012 GDP wasn’t stellar, but it sure was a lot better than the headline 0.1% contraction suggested. Why don’t we have to panic? Read more